BACK ON TRACK?: The world began what could be a recovery for gold in both the jewelry and industrial sectors, driven by strong demand in India and China
AP, DENVER, COLORADO
Thursday, Feb 18, 2010, Page 5
Demand for gold made a slight recovery in jewelry and industrial markets, an industry trade group said yesterday.
Jewelry, the biggest market for gold, had the smallest decline of the year in the fourth quarter — down 8 percent — as stronger demand in India and China offset weaker markets in Western countries, the World Gold Council (WGC) said. It was an indication some consumers are adjusting to higher prices, the council said. Gold jumped 38 percent in the quarter to an average of US$1,099.63 an ounce.
Overall, demand among investors, industrial users and jewelry makers totaled 819.7 tonnes in the last three months of last year.
That was down from 1,077.1 tonnes in the year-ago quarter.
The industrial and dental uses sector saw an 11 percent increase to 99.7 tonnes, largely because of fresh demand from electronics manufacturers.
“What we’ve seen is the beginnings of, and I don’t want to overstress this, but the beginnings of what seems like a bit of recovery in both jewelry and industrial,” said George Milling-Stanley, the council’s managing director for government affairs.
The group, which is based in London, saw more interest in emerging markets such as India, typically the No. 1 gold consumer, and China.
India’s gold consumption for jewelry rose 27 percent in the quarter to 137.8 tonnes. China reported a 2 percent increase to 86.5 tonnes for use in jewelry. In the US, it fell 17 percent, the council said.
Total global investment fell 50 percent to 219.5 tonnes. A year ago, investors sought out gold as a safe haven as the global recession deepened.
For the year, gold demand totaled 3,385.8 tonnes, compared with 3,305.7 tonnes in 2008.
Jewelry consumption fell 20 percent to 1,747.3 tonnes; investment rose 7 percent to 1,270.9 tonnes; and industrial and dental use fell 16 percent to 367.6 tonnes.
Because of the rising prices, the gold demand was valued at a little more than US$100 billion last year for the second consecutive year.
Looking ahead, the council expects the jewelry and industrial demand to continue to improve as long as the world economy is recovering.
Investors likely will continue to invest either way. If the economy weakens, they will look to gold as a safe haven; if it improves, they will look to gold to hedge against inflation, the council said.
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